I look for more movement upward in both gold and silver. However I see gold continuing to outperform gold and it will keep moving the ratio of silver to gold up towards 70:1. A year ago at this time we were at 47:1, now we are at 56:1 and that appears to keep climbing.
I think one of the main reasons china has imported more silver then last year is because of the olympics in 08'. They have been gearing up for this event since they were awarded it. China will be issuing commerative silver sets for the olympics. Now with 1.1 billion people in china, if only 20% bought just (1) 1 oz coin. Well I'm sure most people can do the math, over 200 million ounces. Thats just in the country of china. So Mr. Ted Butler claim that china is the big short position on the Comex, may not be that far fetched after all. This maybe done until china has enough silver for this event. Which don't let anyone kid you. This will be a big world event for them. They have been purposely surpressing the price over the past few years for maybe just that reason. The problem is that the Comex has allowed them to get away with it.
Trends are by definition dependent entirely on past behaviour, so not looking at the past makes for a really hard time seeing what is happening. This is not a 2 year precious metals run, it is a legitimate and long bull trend which needs to be evaluated in proper context in order to gain the best profits, IMHO. I bought gold at 600 and recently sold it (over 800) and moved more into silver. I could be wrong, but my calculations show me that silver has much more powerful upswings that can be far more profitable than those of gold. The market can be cornered much easier and the sheer size of the market is akin to picking a stock with a tiny float. Gold right now is dealing with much greater psychological resistance at 850 while silver is dealing with very little at these levels. Time will tell, I see both as being great investments.
I first started posting on this board back in the beginning of 2005, and I've held some and traded some this entire time. Although I've watched these boards I went over to stockhouse boards but the discussions have dried up so I think I'll come back.
I guess I have 3 or 4 points, the best for last:
1)He's right about the ratio, but I remember it once going to about 44:1 and the fact that its back at 56:1 is something that happens over time. If you check historical charts silver may lag 3-6 months behind gold but then whip back to a more dominant position. Dig out a 1979 chart and, or look over the last 5 years and you'll see it from time to time, this lagging behavior. The lagging also seems to happen late in the year and pick up in the beginning of the new year. Check seasonally adjusted average charts on silver.
2)On the statement that shortage is not occuring: I buy physical bullion as do a few of my friends across Canada. Usually 100 oz bars. I have two suppliers in Toronto, and my friends have them all over the country. when I first started a 100oz bar took 3-4 business days for delivery once ordered. I started in 2004. Today, it takes 10-15 business days. Therefore, suggestive of drying supply.
3) Still on statement of shortage, via something I posted on stockhouse board:
<There has been a SIGNIFICANT shift in China usage of, and regulations for silver.
"China releases silver, platinum and palladium trade statistics for October -
Shanghai. November 22. INTERFAX-CHINA - Statistics released today by China's General Administration of Customs show that China imported 4.71 million kilograms of silver between January and October, up 64 percent from the same period last year. "
What does this mean boys and girls??? besides a great christmas present for SLW holders into 2008...
Doing the kilogram to ounce conversion, 166.4 million ounces of silver was imported by china during this years first 3 Qtrs, vs last years 101.5 million ounces of silver. This means 65 million "more" ounces of silver where brought into the country for 3 Qtrs, translating into 86.6 million more ounces of silver for the year. The silver ETF has about 145 million of ounces held, or maybe loaned out, but China's consumption is UNDENIABLE!!
Soooo,..., after this significant increase in usage, China follows up by changing the laws, allowing more silver into the country...
"-China lifts restriction on silver imports -
Shanghai. November 30. INTERFAX-CHINA - China lifted restrictive regulations on high-purity sliver imports that were in place for the last eight years on Nov. 19 this year, the People's Bank of China, China's central bank, and the General Administration of Customs announced yesterday. "
I think China was an exporter of silver the previous year and this year they are now net importer. BIGGEST supporting reason for shortage coming or already here.
Yes I maybe and idiot, however that does not take away from the fact that there appears to be no silver shortage. Which the majority of people believe will be the catalyst to move silver much higher and reduce the silver to gold ratio. Silver is only rising because it is following gold. When gold stops its climb, silver will also stop. Thats apparent whenever gold drops silver gets hammered by twice as much on a percentage bases.
Let's do as little check.....let's say that you held both gold and silver over the last 30 days, well you gold outperformed your silver 6.6% to 5.7%......over the last 1 yr gold outperformed 31.2% to 15%......looks good right?
What about if you held both over the past 2 yrs? Silver outperformed gold 40.5% to 38.4%
What about 3 yrs? Silver wins again 53.6% to 47.8%
What about 5 yrs? Silver wins yet again, 68.4% to 58.4%
Gold is playing a bit of catch-up, but the fundamentals suggest that silver will pop way faster than gold due to the size of the market and the supply and demand issues, namely that gold doesn't get consumed much and silver does...it is also available in the planet at a 16:1 ratio
Personally, I've sold off almost all my gold bullion and stocks and flipped into silver over the past half year, so my bets are made. Good luck all.
Great the only problem with that is its backwards looking. Frankly it means nothing to what happened 2-3 years ago. Gold has outperformed silver over the past year. The ratio of silver to gold has been increasing for about a year in a half now. I just believe that trend will continue, I see nothing in the cards to suggest otherwise. The shortage card has been played over the past 5 years. Silver ran up from basically $5.00 to $15.00 3-4 years ago. Over the past 2 years silver has been flat, basically no gain on ones investment. Actually since the ETF inception silver has remained flat or down slightly. So this shortage you speak of, seems to be a myth.
Not really IMO. I think that Silver will accelerate in it's climb as the world's stock of Silver becomes depleted. Most governments made the mistake of depleting Silver reserves, virtually all reseres are depleted. Once they are all gone, we will see a 200 million oz. per year shortage.
This very fact should cause the ratio to get closer.
Not really IMO. I think that Silver will acdellerate in it's climb as the world's stock of Silver becomes depleted. Most governments made the mistake of depleting Silver reserves, virtually all reseres are depleted. Once they are all gone, we will see a 200 million oz. per year shortage.
This very fact should cause the ratio to get closer.